HP is a technology giant with annual revenue over $115 billion and an expanding technology portfolio that includes servers, storage, printers, computers and software; it also offers a broad range of outsourcing and consulting services. I attended the company’s 2010 global analyst summit in Boston to get an update from executives on its enterprise business portfolio of technology and services. The event was kicked off by Ann Livermore, executive vice president for enterprise business, a long-time leader in HP. HP has amassed a sizable portfolio of acquisitions, including EDS in 2008, and its pending deal to acquire 3Com will pair it up competitively against Cisco Systems. Now, HP has intentions of being a player in cloud computing by providing technology that can easily be utilized virtually across the planet. It appears well poised for this task unless the likes of IBM can challenge HP directly.

HP’s multiyear strategy to lead enterprise computing in products, software and services is based on the convergence of technology infrastructure. HP is positioned to meet the next generation of corporate computing through what I call “computing as a service,” in which organizations can rely on HP to meet a range of needs without having to purchase and maintain in-house technology in their data centers. For this new generation of cloud computing solutions and services, HP has found customers in Verizon and government agencies such as the Defense Information Systems Agency, among others. This approach enables HP to provide its own technology to virtualize computing resources, and it has all the necessary technology, including management and automation software to support the process. HP also sees this as a unique opportunity to leverage its services organizations to develop and deploy new applications and services to operate within the cloud. It is still working out the mechanics of provisioning its computing power for its clients so they can scale their operations efficiently. HP also finds a significant business opportunity in application transformation and migration services when companies want to hand off hosting and management to service providers.

HP is not just focused on managing the computing power of customer organizations. Speakers described the “data center of the future,” which will leverage the latest technology from HP that in operation maximizes computing power and while minimizing energy consumption. HP outlined a new server and management software called Bladesystem Matrix that can provide dynamic computing for business; HP will offer it in its own cloud computing and outsourced services. HP envisions the enterprise IT infrastructure operating in a hybrid manner where data centers have robust integration points with private and public cloud computing, along with outsourced services that it also is well equipped to address. In my analysis of the HP presentations and discussions, the company is not well clued in to the extent of public cloud computing of applications that have been adopted by business in the last three to five years. I believe that HP will get a better understanding of the impact of this public cloud computing as its engagements get deeper and move more into data warehousing and business intelligence with HP Neoview.

HP has focused on enterprise software for many years and expanded through acquisitions such as Mercury Interactive and others focused on IT management. HP is not always thought of as an enterprise software vendor but is the sixth-largest software company in the world. Its software organization is currently looking for a new leader as the previous one, Tom Hogan, has moved on to global sales and operations. HP has been careful not to lose its focus in this area and has stated if it cannot lead a software segment it enters it will not provide enough value for the overall business to make doing that worthwhile. The current exception to that policy is HP Neoview, the integrated database appliance that supports analytic data warehousing and high-throughput transactional computing has only a small portion of market share but does have large upside growth. I recently assessed this as part of my review of the HP global analyst summit (See: “HP Perseveres in Data Warehousing with Neoview“). HP has an aggressive roadmap of how it will help enterprises and IT reduce the cost of “keeping the lights on” (KTLO) for an organization’s core applications through a set of software-based services. HP calls this application modernization, but it is not clear how it can help organizations transition to newer versions of Oracle or SAP, for example, along with newer Internet-based cloud computing business applications. HP has many of the components to advance this strategy; it is not especially savvy on the dynamics of migrating and integrated data from applications, but it wisely partners with Informatica, which does this set of activities very well as I just recently reviewed its efforts at their global analyst summit (See: Informatica Demonstrates the Value of Data for Every Organization”).

HP has another focus, on the role of content and records management (which it calls information management) and governance of these assets. This is clearly a growth area, and HP has made acquisitions here while also helping IT manage resources and systems such as Microsoft Sharepoint that plague organizations with storage demands and full life-cycle management from creation to destruction. HP is betting it will become the number-one IT management software company, but it still has a lot to do to provide for CIOs and IT executives the tools to manage data and apply analytics to their portfolio. There are many new approaches to this, including what Splunk has been doing for the last three years to leverage IT data with search and analytics across the portfolio of systems, as I have written about (See: “Splunk Expands IT Search into Information Applications“). HP is making advancements and believes its software portfolio will be the place for further expansion and investment through acquisitions; it wants to compete more aggressively against IBM and Oracle but most importantly to satisfy its customers. These areas include everything data-focused management, business intelligence, applications that can help manage companies’ legacy applications and IT tools that helps the CIO. HP has made good progress on the roadmap it outlined in 2008 that I assessed and made predictions about (See: “HP Software Advances and Transforms”), and now its significantly enlarged consulting and outsourced services is available to manage the software portfolio.

At the summit I enjoyed the HP Labs session, as the brightest minds inside HP discussed their research on the next generation of technology and computing. HP has many “big bet” technology areas in R&D, including digital print, immersive interaction with people, information management, analytics, cloud computing, intelligent infrastructure and sustainability. The speakers revealed many practical activities in these areas but also articulated a vision of what is possible with virtual storage and the energy required to operate across backplanes in data centers by using computational distance and photonics. The discussion even touched on computational physics: HP has been looking at the details of creating the ability to listen to the earth’s movements as snakes travel on it and also the movement of atoms that happens when idiots pack bombs onto their bodies and walk with them. This was fascinating, and even if the deep insights of HP’s R&D do not become commercialized in products, they may result in government contracts for cyber and physical security operations.

The 2010 HP analyst summit was full of great insights about its current and future business. We sometimes underrate its role in the realm of technology innovation, which is a misperception, because it has taken steps to monetize on every aspect of its technology from printers to services to software. There are some areas where it is leaving of the field to IBM, Oracle and SAP to compete, for instance enterprise applications and middleware, but instead seeks to be the provider of the underlying computing platform such software requires. I would have liked to hear from CEO Mark Hurd, who is always up front and personal in his appearances, but I guess he does have a lot to do in managing a $100 billion plus business with over 300k employees. As this technology giant continues to march forward, I hope to see someone take its software business to the next level and be more evidently competitive against the other major providers in the market. HP definitely has plenty of upside as it strives to dominate its markets around the world.

Mark also blogs at ventanaresearch.com/blog.